The auto bailout success story: Editorial

Executives of the Big Three automakers appear before the Senate Banking Committee in Washington on Thursday, Dec. 4, 2008. From left: Rick Wagoner of General Motoers; Ron Gettelfinger, president of the United Auto Workers; Alan Mulally of Ford; Robert Nardelli of Chrysler; James Fleming, president of the Connecticut Automotive Retailers Association; and Keith Wandell, president of Johnson Controls, Inc.Doug Mills/The New York Times

Remember the right-wing vitriol over President Obama’s bailout of U.S. automakers? The spittle that flew while tea party critics flailed over the “big-government takeover,” and trying to decide whether that made the president a commie, a socialist or worse?

Fast-forward to 2013 and here’s what you’ll find: Every dollar of TARP bailout money has been repaid, auto industry jobs are continuing to expand and Detroit carmakers are looking at another record year for sales.

That’s the optimistic take-away as we approach two key anniversaries in the financial crisis: Yesterday marked five years since the Lehman Brothers bankruptcy filing that signaled the start of the meltdown. And in a few weeks, on Oct. 3, it will be five years since Congress and the Bush administration created TARP — the Troubled Asset Relief Program — the bank bailout that was the key tool the feds used to replenish the banking system, rescue failing carmakers and try to help underwater home­own­ers.

That’s right: Though it was Obama who bailed out the auto industry, it was his Republican predecessor, George W. Bush, who first established the federal bailout program.

The failure of the American auto industry would have been a catastrophe. The ripple effect on parts and materials suppliers — steel, rubber, glass and the fabricating trades — would have cost a million jobs and $150 billion in lost tax revenue. The crash would have been felt in every corner of the economy, from factories to dealerships to local governments and schools.

As the anniversary approaches, you won’t hear conservatives crow about TARP’s successes. The same blinders that allow the right to forget that universal health care was first a Republican creation also help obscure the reality that Obama isn’t responsible for TARP’s creation, either.

Yes, taxpayers’ bailout of billionaires who were largely responsible for their companies’ troubles was a bitter pill. But it was necessary medicine, and a leap of faith that ultimately put the brakes on the economy’s free fall.